DIRECTORS REPORT To The Members, Your Directors take pleasure in presenting the Twenty Ninth Annual Report together with the Audited Balance Sheet as at 31 March, 2015 and the Statement of Profit & Loss for the year ended 31 st March, 2015. STATE OF COMPANY'S AFFAIRS: Your Directors place on record that the company has registered a remarkable performance over the previous year, and will try its best to increase the growth percentage with same efficiency. There is remarkable increment in turnover of the Company. The Profit before tax for the year was INR 3,97,06,374/- (P.Y INR 2,87,60,386/-) whereas the profit after tax for the year was at INR 2,50,91,820/-(P.Y INR 1,90,30,588/-), an increase of 32% and 48%, over the previous year. The Company remains focused to improve its core business and look for higher market share in the business segments in which it operates. There is even remarkable increment in the net revenue during the year from operation of the Company was INR 9,28,40,496/- as against INR 6,98,17,172/- in the current year, registering the growth of 33% over the previous year. The Management of Company has decided to expand its core business of providing support service vessels for coastal surveillance transportation of men and materials through water ways and patrolling to other Companies apart from Government and accordingly the Company is in process of buying the new vessels which will generate substantial revenue to the Company. DIVIDEND: The Board of Director of the Company has paid Interim Dividend of Rs. 0.25 (2.5%) (L.Y. Rs. Nil) per Equity shares of Rs. 10/- each of the Company in the F.Y. 2014-15. The Interim Dividend absorbs Rs. 12,32,150/-, excluding corporate dividend tax. The Board of Director of the Company has recommended Final Dividend of Rs. 0.25/- (inclusive of corporate dividend tax) (2.5%) (L.Y. Rs. Nil) per Equity shares of Rs.10/- each. The Final Dividend will absorbs Rs. 12,32,150/-, including corporate dividend tax. FIXED DEPOSITS: The Company has not invited and accepted any Fixed Deposits from the public within the meaning of with Section 73 and 74 of the Companies Act, 2013 read with Rule 8(5)(v)&(vi) of the Companies (Accounts) Rules, 2014, hence disclosure required under above rule not applicable to the Company. PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT. 2013: There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY: Your Company has laid down a set of standards, processes and structure which enables to implement internal financial controls across the organization and ensure that the same are adequate and operating effectively. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND: There was unpaid/unclaimed Dividend of Rs. 1,13,923 declared and paid in Financial Year 2014-15. The company has unpaid/unclaimed dividend of Rs. 3,17,967/-for past years which are not due for transfer to Investor Education and Protection fund pursuant to the provisions of Section 125 of the Companies Act, 2013. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT: No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate on the date of this report EMPLOYEES STOCK OPTION PLAN: The Company has not provided any Stock Option Scheme to the employees. DIRECTORS: Your Company has 5 Directors consisting of 3 Independent Directors, 2 (Two) Executive Directors including Managing Director as on March 31,2015. During the current financial year the following changes have occurred in the constitution of directors of the company: DIRECTORS RETIRING BY ROTATION: In terms of Section 152 of the Companies Act, 2013, Mr. Suresh Pawar being longest in the office shall retire at the ensuing AGM and being eligible for re-appointment, offers himself for re-appointment. The Directors recommended reappointment as proposed in the notice for the Annual General Meeting. INDEPENDENT AND NON-INDEPENDENT NON-EXECUTIVE DIRECTORS: As prescribed under Clause 49 of the Listing Agreement entered with Stock Exchanges and Section 149(6) of / disclosures received from the Directors, the following Non-Executive Directors are Independent Directors:- 1.Mr. Sujay Nitin Kantawala 2. Mr. Pramod Dhoduram Patekar 3. Ms. Harshika Katariya WOMAN DIRECTOR: In terms of the provisions of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a company shall have at least one Woman Director on the Board of the company. Your Company has appointed as Ms. Harshika Katariya Director on the Board of the Company w.e.f. 01.04.2015. MANAGING DIRECTOR: Mr. Avik George Duke has been serving as the Managing Director of the Company since 12th April, 2010, with the approval of the shareholders, from time to time. The Board of Directors of the Company at their meeting held on 30.07.2015. has approved the re-appointment of Mr. Avik George Duke as Managing Director subject to the approval of the shareholders. Accordingly, the approval of shareholders is being sought forhis re-appointment as Managing Director of the Company for a period of 5 years. NUMBER OF MEETINGS OF THE BOARD: Regular meetings of the Board are held to discuss and decide on various business policies, strategies and other businesses. The schedule of the Board/Committee meeting to be held in the forthcoming financial year is being circulated to the Directors in advance to enable them to plan their schedule for effective participation in the meetings. Due to business exigencies, certain business decisions are taken by the Board through circulation from time to time. During the Financial Year 2014-15, the Company held 4 board meetings of the Board of Directors as per Section 173 of Companies Act, 2013 which is summarized below. The provisions of Companies Act, 2013 and listing agreement were adhered to while considering the time gap between two meetings. COMMITTEES OF THE BOARD: The Company has several committees which have been established as a part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes The Company has following Committees of the Board: *Audit Committee 'Nomination and Remuneration Committee 'Shareholder grievances committee The details with respect to the compositions, powers, roles, terms of reference, etc. of relevant committees are given in details in the 'Report on Corporate Governance' of the Company which forms part of this Annual Report and attached as Annexure- D. CORPORATE SOCIAL RESPONSIBILITY: The company does not meet the criteria of Section 135 of Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 so there is no requirement to constitute Corporate Social Responsibility Committee. PERFORMANCE EVALUATION OF THE BOARD: The Nomination and Remuneration Committee at its meeting and the Board of Directors at its meeting had laid down criteria for performance evaluation of Directors, Chairperson, Managing Director, Board Level Committees and Board as a whole and also the evaluation process for the same. The statement indicating the manner in which formal annual evaluation of the Directors, the Board and Board level Committees are given in detail in the report on Corporate Governance, which forms part of this Annual Report. The performances of the members of the Board, the Board level Committees and the Board as a whole were evaluated at the meeting of the Committee of Independent Directors and the Board of the Directors. DIRECTORS RESPONSIBILITY STATEMENT: Your Directors state that: a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) That the Directors have prepared the Accounts for the financial year ended 31 st March, 2015 on a going concern basis. e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. BUSINESS RISK MANAGEMENT: Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Clause 49 of the listing agreement, the company has constituted a business risk management committee. The details of the committee and its terms of reference are set out in the corporate governance report forming part of the Boards report. At present the company has not identified any element of risk which may threaten the existence of the company. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES: There was no contract or arrangements made with related parties as defined under Section 188 of the Companies Act, 2013 during the year under review. SUBSIDIARY COMPANIES: The Company does not have any subsidiary. AUDITORS: M/s. B. B. Shah & Company, Chartered Accountants, Mumbai were appointed as Statutory Auditors of your Company at the last Annual General Meeting held on 25th September, 2014 for a term of five consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting. AUDITOR'S REPORT: Information and explanations on items contained in the Auditors Report which might be considered to be "Reservations, Qualifications or adverse Remarks" is given below: With regard to non provision of Gratuity payable under the Payment of Gratuity Act, 1972, which is accounted on its payment pursuant to the accounting policy followed by the company. SECRETARIAL AUDITOR: The Board has appointed M/s. Ravi Kothari & Associates, Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31,2015 is annexed herewith marked asAnnexure-Ato this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: All related party transactions that were entered during the financial year were in the ordinary course of the business of the Bank and were on arms length basis. There were no materially significant related party transactions entered by the Company with promoters, Directors, Key Managerial Personnel or other persons which may have potential conflict with the interest of the Company. Considering the nature of the industry in which the Company operates, transactions with related parties of the Company are in the ordinary course of business which are on arm's length basis. Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm's length basis, form AOC-2 is not applicable to the Company. EMPLOYEE REMUNERATION: (A) The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable to the Company as no Employee of the company was in receipts of remuneration aggregating to Rs. 60,00,000/- or more for the year when employed through out the year or Rs. 5,00,000/- per month when employed for part of the year. (B) The ratio of the remuneration of each director to the median employee's remuneration and other details in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure -B. STATUTORY DISCLOSURES: (1) CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO: The disclosures to be made under sub-section (3) (m) of Section 134 of the Companies Act 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 by your Bank are explained as under: Conservation of Energy, Technology, Absorption etc: NIL EXTRACTS OF ANNUAL RETURN: Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extracts of the Annual Return as at March 31,2015 forms part of this report as Annexure -C. COMPLIANCE OF LISTING AGREEMENT: Your directors are happy to place on record that, the management of the Company have pursued seriously and sincerely the compliance requirement of the Bombay Stock Exchange Limited. CORPORATE GOVERNANCE: Your Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Report on corporate governance as stipulated under clause 49 of the Listing Agreement forms the part of the Annual Report The requisite certificate from the Practicing Company Secretary confirming the completion of condition on Corporate Governance (Attached herewith) MANAGEMENT'S DISCUSSIONSANDANALYSIS: 1. Industry Trends and Developments The year 2014-15 has been a mixed year for global technology market. There is an increasing requirement for specialized offshore vessels globally for surveillance for transportation of men and materials through waterways and for vessels for security purpose and this trend will continue to grow. Your Company's range of professional services are inspection of oil fields platform & operations, diving trainings, vessel management and marine logistics, charter of Fast interceptor Craft and allied marine services for surveillance. 2. The year in perspective: Your Company has made remarkable progress with ongoing projects in chartering the Fast Interceptors CraftsA/essels for guarding the offshore boarders and for transportation of men and materials through waterways and is planning to expand the same by entering into contract with other Companies apart from Government for provided support service vessels for patrolling 3. Future Prospects & Outlook: The Management of the Company are cautiously optimistic about future growth prospects and working towards new project, facilities expansion and most importantly, understanding the changing customers preference and demands and fostering long term profitable relationship with Customer. 4. Business Risks and Management's assessments - Your Company has identified the following risks that may arise: Availability of financial resources: The Company expects a substantial increase in revenue by way of additional contracts. However these contracts will require heavy investment for procurement of vessels and offshore assets and have tenure for fixed period. 5. Human Resources and Industrial Relations- The Board wishes to express its deep appreciation to all employees in your Company for their contributions to your Company during the year. Harmonious relations continued to prevail in the organization, strengthening the well-established traditions of fairness in dealings and commitment to the future growth of employees through sustained growth of your company. Financial Condition and Operational Performance 6.1. Share Capital The Company has at present only one class of shares. The authorized share capital is 52,50,000 Equity shares of Rs. 10/- each, constituting to Rs. 50,500,000/-.There was no increase in the paid up capital of Rs. 49,78,300/- during the year under review, outstanding at the year end to 49,78,300 equity shares of Rs. 10/- each. 6.2. Fixed Assets During the year 2014-2015 the Company has added INR 520/- Lacs to the gross block of assets. 6.3. Net Worth The Net Worth for the year ended March 31,2015 is INR 11,28,49,039/-. compared to the Net worth of INR 9,04,30,923/-. for the same period last year registering overall improvement in the Net Worth. The Net Worth has been increased by 24.79% compared to previous year 26.65 %. 6.4. Revenues In the year under review the total revenue of the Company was INR 9,28,40,496/- compared to INR 6,98,17,172/- for the same period in the previous year. The increase in revenue ensures companies expansion. The revenue has been increased by 33% as compared to previous year. 6.5. Operating Profit (EBIDT) The Company earned operating profit of INR 4,85,40,114/- (P.Y. INR 3,97,81,461/-) representing 52.28% (P.Y 56.98%) of gross revenue, which is due to comparatively increase in direct expenses and other expenses. 6.6. Internal Control Systems and their adequacy The Company has adequate internal control systems in place. With a view to monitor the Company's performance as well as to make sure that internal checks and controls are operating properly, the Company has system of checking the adequacy of its internal control. By the order of the Board For DUKE OFFSHORE LIMITED SD/- (Avik George Duke) Managing Director DIN:02613056 Place: Mumbai Date : 28.05.2015 |